American cultural norms and views about marriage are changing. Once viewed as integral parts of life, marriage is increasingly rejected among Americans in general, and especially among younger generations. Almost half of American households are unmarried, a number high enough for the CDC to find that “cohabitation [without marriage] is now a regular part of family life in the U.S.”
Not surprisingly, state and federal laws are lagging behind society. Unmarried couples have special and urgent needs for proper estate plans that address their unique circumstances and adequately protect them.
Estate planning for unmarried couples often require an individualized approach to approach their goals. If you are in a committed but unmarried relationship, here are some documents that you should consider when you either create or update your estate plan.
Four Tips for Commitment without Marriage
1. Living Trusts
Living trusts help protect your property if you ever become incapacitated and is a private process that skips probate after you pass. Trusts do often cost more than wills, but they essentially front-load costs to while you are alive, rather than after you pass. Trusts give you more control over your property than other options, and is generally the best option for anyone, and unmarried couples specifically.
In Colorado, a will is also a very viable option to govern where your property goes after you pass away. Probating a will in Colorado is both efficient and cost-effective. However, a will does not protect you if you are ever incapacitated, the probate process is public, and you may lose control over “when” your property is distributed after you pass.
Using a will as a “backup” to your trust is an important strategy to implement. A trust only control assets that it owns, and using a will to put any property not into your trust into your trust can prevent any unwanted outcomes with your property.
What happens if you do not have any estate plan? Colorado law governs what happens to your property, which may or may not line up with what you want to have happen. Within the context of an unmarried couple, your partner has no right to get your property after you pass away. Effectively, if you are unmarried and have no estate plan, your partner is disinherited. Therefore, it is crucial that you have an estate plan to protect your beloved partner because state laws do not recognize your relationship for estate planning purposes.
3. Beneficiary Designations
Many types of property, such as IRA’s, 401(k)’s, life insurance, etc. allow you to name who you want to receive those proceeds after you pass. This is called designating beneficiaries of that property. If you are unmarried, you must review these beneficiary designations to make sure they reflect your wishes and that your partner has an interest in those accounts. Otherwise, your partner will most likely have no right to that property.
If you have a trust, you may want to name the trust as the beneficiary so all your property is governed by the trust and its provisions.
4. Power of Attorney, Designation of Health Care Surrogate, and Similar Documents
These documents that you can control who steps into these various roles and performs those functions. Powers of Attorney documents address who can step in and make either medical or financial decisions for you if you are unable to make those decisions for yourself. If you do not have a Power of Attorney, then a court will have to appoint someone to make those decisions for you. Designating a Health Care Surrogate, Living Will, and other documents also address different angles of your health care in case you need help, and are strategies that you need to account for.
Regardless of whether your committed relationship has existed for decades or just starting, you probably have a lot of questions about how to protect your loved one. There are many strategies that can help you answer questions about retirement, protecting and providing for loved ones, teaching and sharing your values with your children, and how to pass on your property to whom you want. Estate planning is an imperative decision for unmarried couple because it protects that relationship.
If you are in an unmarried but committed relationship and you are unsure what strategy is best for you, contact The Rains Law Firm or schedule a complimentary initial meeting to discuss what strategy options make the most sense for you.